Futures Slide After Tesla, IBM, Meta Report Earnings; Middle East Remains Aflame as Houthis, Iran Escalate; Midterms Have Republicans Worried

As was widely expected, quarterly returns from SpaceX drove stocks higher on Wednesday, but each day during any earnings season tells a different story with diverse stocks reporting for the given quarter.

After Wednesday's close, three big names hit the wires with thrid quarter results. IBM (IBM), Tesla (TSLA), and Meta Platforms (META) all moved in after-hours trading.

IBM posted third quarter revenue of $17.1 billion on Wednesday, up 5% from a year earlier, and adjusted earnings of $2.95 a share, both ahead of estimates. The company also projected free cash flow to increase by more than $1 billion in the fourth quarter and projected revenue growth of 4-5% for the upcoming quarter. Despite the rosy outlook, investors preferred to take profits. Shares of "Big Blue" dropped by more than five percent in after-hours trading and extended losses into Thursday morning.

Tesla (TSLA) reported quarterly revenue of $28 billion, compared with analysts’ expectations of $28.3 billion. Adjusted earnings of $0.48 per share narrowly topped estimates of $0.45 per share. The electric car company lowered its full year 2026 capital expenditures to $20 billion, down from $25 billion. Shares sold off afte the report. As of Thursday morning's pre-market ticker, Tesla is down more than three percent on concerns the company will be unable to meet projections set by Chairman Elon Musk.

Exclusive of Thursday's expected downturn, Tesla is off 12% year-to-date, the worst performance of any Mag7 stock.

Finally, Meta Platforms (META) completed the trifecta of sour notes, beating EPS and revenue estimates, but top-heavy Capex spending on AI quieted investor enthusiasm for the social network leader. Shares were seen slipping by 2-3% in early morning trading.

Elsewhere, reporting overnight:
Lam Research (LRCX) - beat top and bottom, but warned supply chain issues will delay revenue growth in upcoming quarter, sending the stock down more than seven percent
Texas Instruments (TXN) - EPS and revenue beats, stock flat to one percent lower
Crown Castle (CCI) - EPS and revenue miss, stock down less than 1%, but figures to be lower after Thursday's open

Thursday, before the opening bell:
Comcast (CMCSA) - EPS, revenue beat, shares up 2-3%, but stock is trading at depressed levels, down 21% y-t-d
Tractor Supply (TSCO) - EPS, revenue beat, reaffirms guidance, shares down 5% pre-market
Lockheed Martin (LMT) - EPS, revenue beat, stock up 3-4% on positive guidance, record backlog
Nokia (NOK) - Solid beats on revenue, EPS, but stock slips 5-6% on lowered AI CAPEX spending
Blackstone Group (BX) - EPS beat, revenue shortfall, stock down 3-4% pre-market
American Airlines (AAL) - EPS, revenue beats, but guidance was negative on higher fuel costs, shares down 4%
Valero (VLO) - energy company beats top and bottom, shares up 1-2%

The general takeaway from pre-market sentiment is that the AI buildout trade is weighing heavily on stocks related to semis and tech, especially Mag7, affecting overall mood of the market. Stock futures have been deep in the red all morning Thursday. An hour prior to the open, Dow futures are off 310, NASDAQ futures have shed 390 points, and S&P 500 futures are down 73 points, all pointing to a tense opening to the downside.

Adding to the uneasy mood, Asian stock indices imploded overnight. South Korea's Kospi dropped more than three percent; Japan's NIKKEI fell 2.65%, and Hong Kong's Hang Seng ripped lower by three percent.

Continued rioting by migrants in France has kept European stocks under pressure, and French 10-year bonds hit five percent (5%) for the first time since 2002.

In the continuing catastrophe in the Middle East, Iran boldly claims to have hit seven oil tankers in the Strait of Hormuz as Houthi attacks on Saudi oil infrastructure continue at a frenetic pace. With Washington taking an eased-back approach - President Trump avowing not to strike Iran until after the midterms - conditions in the region are deteriorating rapidly.

Brent crude oil futures topped $112 overnight and WTI futures have dropped below $100 due to arbitrage and speculative trading, having little to do with actual pricing of oil coming out of the Gulf region or elsewhere. Gas prices in the U.S. are also lower, pressure being applied by the White House in advance of the midterm elections. Missing the big picture completely, precious metals continue to sell off. Gold traded as low as $4,054 and silver slipped below $56/ounce.

Prospects leading into Thursday's trade and the seven remaining market days before the midterm appear to be slipping from the Republican's narrative control. Beyond overvaluation, cracks in the credit markets are re-appearing due to overcrowding by the need for AI spending. 10-year yields are at 5.15% and the 30-year is yielding 5.35%, clearly, the easing off in credit markets is only temporary. Real, sustained pressure on fixed income has not yet been fleshed out. Next week's FOMC meeting may take the temperature down a bit further, only if the Fed decides to keep rates on hold, though the December meeting may turn out to be a make-up call, with a possible 50 basis point hike getting attention.

There's no fixing what's being broken by runaway politicians, crazed neocons, overspending on AI, and the hidden commercial real estate crash without a serious step back in stocks. Thursday's action may offer a glimpse of what's ahead.

Simply put, there are just too many bad things happening for stocks to keep ratcheting higher.

At the Close, Wednesday, October 21, 2026:
Dow: 52,856.09, +360.21 (+0.69%)
NASDAQ: 26,702.86, +278.04 (+1.05%)
S&P 500: 7,757.17, +44.60 (+0.58%)
NYSE Composite: 24,253.12, +62.51 (+0.26%)